The plaintiffs moved to strike the defendant’s statement of defence for failure to pay a prior $12,500 costs award arising from a motion to lift the bankruptcy stay under the Bankruptcy and Insolvency Act.
The defendant had declared bankruptcy before the costs order was made and argued the costs constituted a provable claim in bankruptcy rather than a personal post‑bankruptcy liability.
The court considered Rule 57.03 of the Rules of Civil Procedure and the distinction in bankruptcy law between plaintiff’s and defendant’s costs.
Applying the jurisprudence flowing from Re British Gold Fields of West Africa Ltd., the court held the costs were provable in bankruptcy and did not create a personal post‑bankruptcy obligation absent a later fraud finding under s. 178 of the BIA.
The motion to strike the defence was dismissed.
